Likes uranium and it is ultimately going to get more of a play but his problem with Denison (DEN-T) and Cameco (CCO-T) is the price to earnings ratio or the price to cash flow ratio is fired too high. He prefers Uranium Participation (U-T) which gets rid of the price earnings ratio issue and you get rid of the exploration rests. Given a three outlook, Uranium Participation could be much higher.
Uranium has ups and down, but a revival in nuclear power helps. It's broken out of $4.50 and held, which is encouraging. $5.50 is resistance and could bounce in this range.
106 million pounds mined from ground sources, but 180 million pounds were used last year. The difference has come from warheads, and inventories.
There is a shortage of Uranium.
Denison has a great management team. Has backing of the Lunden family. It owns 2 out of 4 of the mills that can process uranium. Around $12 is a safe bet if you want to hold if for a year.
Has become the uranium play be default with the Cigar Lake mine problems of Cameco (CCO-T), Has production, so is looking better than a lot of the juniors.
Merging with IUC (IUC-T). These are 2 B companies, putting them together and not getting anything out of them but production growth. Feels uranium prices are going through $100 over the next year or so. Prefers Uranium Participation (U-T).
What hurt this company, after the disaster at Cameco (CCO-T) was that they where in line to do some of the milling work at Cigar Lake. This will actually be recovered with much higher uranium prices.